Presented at a seminar sponsored by
the Organization for Competitive Markets, Omaha, NE, September 1999.

Conventional wisdom in the U.S. seems
to be that only the market is capable of doing things right. Anything
that interferes with the market; the government, public attitudes,
or cultural values, for example; by definition creates economic inefficiency
and is bad for society. Few people are aware of the origin of this belief,
and even fewer seem willing to challenge it. In fact, the few who dare
to question the market’s sanctity are quickly attacked and degraded
by people in powerful places with obvious self-interest in perpetuating
the belief, including an army of economists.

Current belief in the sanctity of the
market can be traced back to statements by Adam Smith, the father of
conventional economic theory, in his book, The Wealth of Nations.
"It is not from the benevolence of the butcher, the brewer, or the baker,
that we expect our dinner, but from their regard to their own interest.
We address ourselves, not to their humanity but to their self love, and
never talk to them of our necessities but of their advantages" (p. 7).
Later, in reference to trade, Smith states, "he intends only his own gain,
and he is in this, as in many other cases, led by an invisible hand to
promote an end which was no part of his intention." "By pursuing his own
interest he frequently promotes that of the society more effectually (sic)
than when he intends to promote it" (p. 199). These statements provided
the foundation of the contemporary economic wisdom -- that pursuit of short
run self-interests is transformed into achievement of the public good,
as if by an invisible hand. The greatest societal good results from
the greatest individual greed.

But, Adam Smith didn’t say that pursuit
of maximum profits and growth by large, corporate organizations would result
in the greatest benefit to society as a whole. The economy of Smith’s day
was quite different from today. In the late 1700s, most economic enterprises
were small, family operations. For such operations, land, labor, capital,
and management often resided in essentially the same entity, and farming
was still the dominant occupation. Few enterprises were large enough to
have any impact on the marketplace as a whole. Most market transactions
were direct between buyer and seller -- there were few opportunities for
deceptive sales practices. Trade was mostly in basic commodities – every
seller’s wheat, bread, or shoes were pretty much the same as those offered
for sale by other sellers. Under these conditions, profits were quickly
competed away in highly competitive local markets.

There were few corporations in Smith’s
time, but he wrote about the dangers of monopolies and excess profits,
-- "the price of a monopolist is upon every occasion the highest than can
be got (p. 28)." He considered "joint stock companies," corporations, to
be inherently irresponsible entities, and could think of only a handful
of endeavors where publicly owned corporations could be justified (p. 341).
Even those would require close public scrutiny and government control,
he warned.

Human populations back then were small
enough and technologies were sufficiently benign that people could have
little permanent impact on their natural environment – at least not on
a global scale. Strong cultural, moral, and social values dictated the
norms and standards of "acceptable" individual behavior. Smith could not
conceive of a society in which the welfare of the poor and hungry would
not matter, or where people in general would behave in unethical or immoral
ways. "No society can surely be flourishing and happy, on which the far
greater part of the members are poor and miserable" (p 36).

In the environment within which conventional
economics was born, in Smith’s time, pursuit of self-interest might have
served the interests of society reasonably well. But, the world has changed
over the past 200 years. In fact, none of the important assumptions of
truly competitive markets -- the prerequisite for efficient resource allocation
by free markets – are valid in the economy of today.

Today, giant corporations dominate
almost every sector of local and global economies. Through mergers, joint
ventures, and strategic alliances, corporations have formed "virtual" monopolies
– irresponsible entities that maximize profits "upon every occasion." Corporate
profits today are far larger than any concept of "normal" profit envisioned
in classical economics. Corporations are inherently non-human entities
– regardless of what the Supreme Court has said and regardless of the nature
of their managers and stockholders. Corporations have no heart, they have
no soul.

The basic economic resources of land,
labor, capital, and management now reside in separate entities, sometimes
divided even among nations. Labor and management are in continual conflict,
and most corporate shareholders – owners of mutual funds and pension funds
-- are hardly conscious of how much of what companies they own. Land has
become just another marketable commodity to be exploited and used up.

Producers and consumers have become
disconnected, geographically and conceptually, as a consequence of industrialization.
Consumers no longer have any personal knowledge of where their products
come from or of who is involved in their production. They must rely on
a complex set of standards, rules, and regulations for product information,
and today’s advertising consists of "disinformation" by design. Superficial
product differentiation abounds -- through processing, packaging, advertising,
and marketing gimmicks -- making price competition impotent if not impossible.

Human activities are no longer ecologically
benign -- if they ever really were. The pressures of growing populations
and rising per capita consumption are now depleting resources of the land
far faster than they can be regenerated by nature. Wastes and contaminants
from human activities are being generated at rates far in excess of the
capacity of the natural environment to absorb and detoxify them. Fossil
fuels, the engine of twentieth-century economic development, are being
depleted at rates infinitely faster than they can ever be replenished.
Human population pressures are destroying other biological species, upon
which the survival of humanity may be ultimately dependent. The human species
is now capable of destroying almost everything that makes up the biosphere
we call Earth, including humanity itself.

The society of Smith’s day was weak
on economics – hunger, disease and early death were common -- but it had
a strong cultural and ethical foundation. However, that social and ethical
foundation has been seriously eroded over the past two centuries -- as
glorification of greed has replaced enlightened self-interest. Civil litigation
and criminal prosecution seem to be the only constraints to the unethical
and immoral pursuit of profit and growth. Concerns of the affluent for
today’s poor seem to be limited to concerns that welfare benefits may be
too high or that they will be mugged or robbed if the poor become too desperate.
Smith’s defense of the pursuit of self-interest must be reconsidered within
the context of today’s society – a society that is now strong on economics
but weak on community and morality.

In addition, contemporary economics
is fundamentally incapable of dealing with relationships among people,
or between people and their environment. This fact is freely admitted even
in basic economics text books. In economics, a market is nothing more than
a collection of independent individual consumers. Human institutions such
as families, communities, nations and cultures have no economic relevance
– other than as collections of individuals. Thus, one gains no economic
well being from relationships -- from identifying with or being a part
of any particular family, community, nation or culture. Believing, trusting,
sharing, caring, and serving are but empty words to the economist. Economic
values relate only to our narrow, short run self interest. Concepts such
as faith, hope, and love are ignored -- they are just illusions of the
human imagination.

In economics theory, the environment
is a passive entity, and thus, has no specific active relationship with
people. The environment is always external, or outside, the economic system.
The environment may be ignored, treated as an external constraint, or as
something that is impacted by economic activity within. But, the environment
is always treated as something separate and apart from people and the economy.
In economics, we are separated from something that we obviously are a part
of. The serenity we feel and beauty we see in nature is assumed to have
no impact on our human well being. In economics, the sense of rightness
that comes from our attempts to be good stewards of the earth’s resources
contributes nothing to our quality of life. It’s economically irrational
to want to leave as much and as good as we have today for the benefit of
future generations.

Economics assumes that trade always
takes place between two people or groups that are equally competent and
capable of pursuing their own self-interest. Sometimes this is a valid
assumption, but often it is not. Economics ignores the fact that the world
is filled with people (and countries) who are inherently unequal in competence
and capabilities. It ignores the fact that giant corporations are capable
of totally dominating conditions of trade with smaller businesses or individuals.
By their very nature, industrial corporations attempt to dominate in their
transactions with all, including with the natural environment.

Any trade that is legal is generally
accepted as free trade by economists. Economics ignores the fact
that the strong may pressure the weak into trading by simply threatening
or withholding benefits, or protection from harm, upon which the weak has
become dependent. Since the strong are not legally required to provide
these benefits, no law is broken.

When trade occurs between the strong
and the weak, particularly when motivated by profit as economists assume,
the weak are invariably exploited by the strong. As long as the outcomes
for strong and weak added together end up in a larger dollar and cent total,
economics concludes that there have been gains from trade -- no matter
that the weak are now even relatively weaker and more vulnerable and the
strong are now even stronger and more dominant. To the economist, justice
and equity are just empty words because they have no means to address them.

In summary, contemporary economics
is concerned totally and completely with pursuit of short run, self interests.
Economics recognizes no unique social value – a community or a society
is nothing more than a collection of individuals. Economics recognizes
no unique spiritual values – and concern for the environment, at least
for its sustainability, is fundamentally spiritual. Economist – and the
industrial, corporate interests that now would raise economists to the
priesthood – would cast out those of us who still believe that quality
of life has social and spiritual dimensions that are just as important
as our narrow economic self interests.

Does this kind of economics really
make sense as a guiding philosophy for America -- and as a model for the
rest of human society? Do we actually believe that the greatest greed results
in the greatest good? Or are we a society that is being shamed into doing
things that don’t make sense because we don’t want to be publicly degraded
and labeled naïve and unrealistic, as being economically illiterate
and irrational?

It’s economics that is out of date
– not small family businesses, caring communities, loving families, nations
with integrity, and cultures with values. We have no ethical or moral obligation
to accept economics as the final arbitrator of who gets a job and who doesn’t,
who stays in business and who doesn’t, what we do in communities and what
we don’t, where food is produced and where it is not, whether or not we
trade, or of anything else. We don’t have to abandon "good" things from
the past just because something "more economically efficient" comes along.
We don’t have to accept "bad" things in the future just because they are
"more economically efficient" than some "good" alternative. We can choose
what we want to keep from the past and what we want to accept in the future.
The market is not God – no matter what the economic priests would
lead us to believe. Economics is a creation of people. We simply cannot
turn loose the thing we created for our benefit and allow it to exploit
the very people it was designed to serve. It just doesn’t make any sense.

Common sense demands that we rethink
and directly challenge the fundamental principles that underlie conventional
economic thinking – line by line, row by row, from the ground up. Any effort
to sustain humanity that fails to attack the problem at its root cause
ultimately is destined to fail. The root cause of the current crisis in
American agriculture is the same as the root cause of ecological degradation
and of social and moral decay – a society that blindly accepts the economic
bottom line as if it were the word of God.

People will pursue their self-interest
– it is an inherent aspect of being human. But, people, by nature, do not
pursue only their narrow short-run individual self-interest. It is within
the fundamental nature of people also to care about others and accept the
responsibilities of humanity. Rethinking does not require that people deny
their self-interest. Instead, it will require that we rise above the economics
of greed to an economics of enlightenment. The invisible
hand can still translate the pursuit of self-interests into the greatest
good for society, but only if each person pursues an enlightened
self-interest – a self-interest that values relationships and ethics as
important dimensions of our individual well being.

Enlightened self-interests includes
narrow self-interest (which focuses on individual possessions) but it includes
also interests that are shared, in which one has only partial ownership
(which focuses on relationships, community, and social values) and interests
that are purely altruistic (which focuses on interests that are solely
others’, which one pursues only out of a sense of stewardship, ethics,
or morality). All three – self-interests, shared-interests, and altruistic-interests
-- contribute to one’s well being or quality of life, but not in the same
sense that greed might enhance one’s material success. Each contributes
to a more enlightened sense of quality of life – which explicitly recognizes
that each individual is but a part of the whole of society, which in turn
must conform to some higher order of things or code of natural laws.

The Dalai Lama of Tibet puts it in
slightly different terms, "If you think in a deeper way that you are going
to be selfish, then be wisely selfish, not narrow-mindedly selfish. From
that viewpoint, the key thing is the sense of universal responsibility,
that is, the real source of strength, the real source of happiness. From
that perspective, if in our generation we exploit every available thing,
trees, water, mineral resources, or anything, without bothering about the
next generation, about the future, that’s our guilt, isn’t it? So if we
have a genuine sense of universal responsibility as the central motivation
and principle, then from that direction our relations with the environment
will be well balanced. Similarly with every aspect of relationships: our
relations with our neighbors, our family neighbors and country neighbors,
will be balanced from that direction" (p. 179)

This enlightened self-interest is a
product of balance among narrow self-interests, community or shared-interests,
and altruistic or other-interests. Enlightened self-interest means that
we cannot simply maximize or minimize any one particular aspect or dimension
of our lives. We cannot be driven solely by greed, by altruism, or by concern
for community. Instead we must pay conscious attention to whether we are
adequately meeting our needs as individuals, as members of some larger
community or society, and as moral, ethically responsible humans. Quality
of life is a consequence of harmony or balance among the three.

The transformation of human society
from one driven by the economics of short-run self interests to one lead
by the economics of enlightenment will not happen overnight, and it may
not happen without struggle and strife. But none the less, it must happen.
The transformation may happen peacefully or may arise out of the turmoil
of an economic collapse . It has already begun, although it may take decades
to complete. But, each of us can begin the transformation for ourselves
whenever we choose.

We can get off of the treadmill that
keeps us running faster and faster as we get farther and farther behind.
We can choose at any time to search for balance and harmony in our lives
and in our work rather than continue the blind pursuit of our narrow self
interest. We can choose a life of quality -- with enough income to sustain
us physically, enough friends and neighbors to sustain us socially, following
a code of ethics and morality that will sustain us spiritually. We can
choose to pursue our enlightened self interest rather than simply give
in to our greed. We can set examples and build models that others may choose
to follow. We can develop the foundation of reality upon which new theories
for an economics of enlightened self interest can be built. We can help
guide humanity toward a sustainable future. And, we can do it at anytime
we choose.